Alaron Currency Comment

CHICAGO - Apr 23/09 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The EC opened higher at 1.3051 on the better than expected increase in the EZ services and manufacturing industries index showed a jump to 40.5 in April, up from 38.3 in March. Hawkish comments from ECB council member Alex Weber stating that s/t rates are not likely to drop below 1.0% and that 'quantitative easing' is not in the immediate future helped support the EC. Prices slid to a morning Lo of 1.2996 as the  equity markets retraced, supporting a  jump in the DX. As equity markets rebounded, the EC followed prices higher into the close to end the session at 1.3109, up 96 tics. The close  above the 10-day MA changes the s/t trend to 'positive' w/improving momentum indicators.  Longs should tighten  'stops' or buy 'puts' to reduce exposure ahead of the May 7th ECB decision. A higher open should find Resistance at 1.3160 and 1.3211, while an open below 1.3067 may find Support at 1.3016 and 1.2923.        

The DX opened lower at 86.28 and rose to a morning Hi of 86.50 as weaker than expected economic data from initial jobless claims and housing existing home sales sent equity markets lower, supporting the safe-haven of the DX. As equity markets rebounded into the afternoon session, the DX retraced towards the close to end the session at 85.76, down 73 tics. The close below the 10-day MA changes the s/t trend to 'negative' w/ neutral momentum indicators.  Traders will key on the move in equity markets over-seas to see if the late day rally can continue. Higher equity markets will entice more risk-tolerance, which could weigh on the DX. Weak economic data Friday from Advance Durable Goods and New Home Sales could dampen higher equity prices. A lower open may find Support at 85.41 and 85.06, while an open above 86.03 should find Resistance at 86.38 and 87.00.

The BP opened higher at 1.4563 and  slid to a morning Lo of 1.4507 against the higher DX. As the equity markets attracted more risk-taking, traders exited the DX, supporting higher foreign markets and sending Sterling to a day-session Hi of 1.4698, before drifting lower towards the close to end the day at 1.4694, up 191 tics.  The s/t trend remains 'negative' w/ neutral momentum indicators. A higher open should find Resistance at 1.4780 and 1.4867, while an open below 1.4612 may find Support at 1.4525 and 1.4357.

The CD opened higher at .8108 and slid to our Pivot level of .8075 along with  equity markets and oil prices, supporting a firmer DX. As the  equity markets rebounded, oil prices supported the move  of the  CD to a day-session Hi of .8181, before closing the day at .8165, up 71 tics.  The s/t trend remains 'negative' w/ neutral momentum indicators. BoC's  Governor Mark Carney acknowledged in the Monetary Policy Report that the BoC will likely leave rates 'unchanges' and only revert to 'quantitative easing' should it be necessary. Traders will key on the DX for direction. A higher open should find Resistance at .8212 and .8259, while an open below .8134 may find Support at .8087 and .8009.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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